Tuesday preview: Intl. Power, IHG, Greggs

8th Aug 2011 16:47

With stock markets heading south at a rate of knots, investors keen to retain some exposure to the equity markets often turn to utilities as safe investments, which makes the timing of the half-year results from International Power propitious.Credit Suisse thinks the company needs a large deal to generate growth and deploy free cash flow. "Organic new-build projects take c3 years to build and often have small equity injections. Acquisitions are therefore more likely, in our view, but recent data points indicate deals may not be cheap, and the value of any synergies/cheap financing is often paid to the seller," the broker notes.Credit Suisse is forecasting International Power will announce interim earnings per share of around 11.3p per share. "More critically, we expect an update on Jirau [hydroelectric plant], where there is scope for negative news on the project post rioting," the broker said.Baked snacks vendor Greggs has proved resilient through the tough consumer environment of the past few years, helped by its value offering, so it will be interesting to see what it says when it issues interim results on Tuesday. Greggs said in May that it intends to increase efficiency to cope with rising ingredients costs rather than passing them on to customers, perhaps a wise move given the economic deterioration since then.Interims from InterContinental Hotels are also due on Tuesday. Broker UBS is not a big fan of the Holiday Inn owner, which it thinks will only see 1% room growth in 2011.Switching to the economy, UK industrial production data for June is due out. Market consensus is for a month-on-month rise of 0.4%.Trade figures are also out, with Barclays Capital (BarCap) predicting the visible trade deficit will narrow to £8.2bn, slightly worse than the consensus of a deficit of £8.1bn.Housing figures from the Royal Institution of Chartered Surveyors (RICS) are likely to show a two-tier market: London and the rest of the UK. "We expect the RICS house price balance to edge up slightly to -25, in line with other recent house price data (consensus -28)," BarCap said.INTERIMSGreggs, InterContinental Hotels Group, International PowerINTERIM DIVIDEND PAYMENT DATETHB GroupINTERNATIONAL ECONOMIC ANNOUNCEMENTSConsumer Confidence (JPN)Machine Tool Orders (JPN)Balance of Trade (GER) (07:00)Current Account (GER) (07:00)Productivity (US) (13:30)NFIB Small Business Optimism (US) (12:30)Unit Labour Costs (13:30)FOMC Interest Rate Minutes (US) (19:15)Q2InterContinental Hotels GroupGMSAberforth Geared Income Trust, RedstoneFINALSDawson International, NWF GroupUK ECONOMIC ANNOUNCEMENTSBRC Sales Monitor (00:01)Balance of Trade (09:30)Industrial Production (09:30)Manufacturing Production (09:30)RICS Housing Market Survey (09:30)NIESR GFP estimate FINAL DIVIDEND PAYMENT DATEBabcock International Group--jh